Bill proposing NDA ban for data center projects passes through Pa. House

A significant legislative proposal, House Bill 2359, has successfully advanced through the Pennsylvania House of Representatives with a vote of 171-31. This bill aims to prohibit data center owners and operators from entering into nondisclosure agreements (NDAs) with local governments if they wish to qualify for Pennsylvania's sales tax exemption on data center equipment. The measure also introduces requirements for developers to create a "community protection plan" for public engagement and submit annual reports detailing local water and energy usage.

According to Representative Joe Ciresi, the prime sponsor from Montgomery, the bill promotes transparency, allowing residents to understand proposed developments without secrecy. The Shapiro administration supports linking participation in the sales tax break to regulatory standards, estimating developers could save $1.9 billion in sales taxes by 2030-31. However, Representative Josh Kail, R-Beaver/Washington, opposed the bill, arguing that NDAs are standard across industries and that local officials should retain the choice to sign them.

Concurrently, the Pennsylvania State Senate's Local Government Committee voted 10-1 to advance a separate proposal for an 18-month moratorium, which municipal governments could individually enact on data center applications. This pause would allow local jurisdictions time to update or implement new zoning ordinances and related regulations for data center developments. Both legislative actions are part of a broader series of votes concerning restrictions and transparency for data center developments in the state.